Practice

A Virtuous Cycle

Eli Meir KaplanCliff Majersik, executive director of the Institute for Market Transformation, is the Vision 2020 chair for Market Transformation.

By 2020 every building will be energy efficient, and we will have boosted compliance of building energy codes to 90%, saving Americans more than $2 billion a year in energy costs, sharply reducing greenhouse gas (GHG) emissions, and making our buildings more resilient in the face of climate change and energy volatility. The appraisal system will recognize the value of energy-efficient features, easing access to funding, mortgages, lower insurance rates, and premium sales prices for energy-efficient buildings.

Our mission at the Institute for Market Transformation (IMT) is to catalyze markets to dramatically reduce energy use in existing buildings across the United States so that today’s state-of-the-art building performance will become standard for all new construction by 2020. To achieve these goals we’ll need a host of smart strategies, but it will take continued collaboration with policymakers, government officials, builders, architects, engineers, and others to put them in place effectively.

For commercial and governmental buildings, we want to inspire the movement to measure, disclose, and improve building energy performance. You can’t manage what you don’t measure, and, until now, there hasn’t been transparency around the energy use of America’s large buildings.

When building owners and managers know exactly how much energy their properties consume, they’ll be armed with the information they need to make them better—saving themselves money and reducing energy use and GHG emissions in the process. New York City’s Greener, Greater Buildings Plan is a great example of a city taking the lead to make its building stock more efficient through transparency.

THE CHALLENGE FOR CODES

On the residential side, one of the key strategies is building codes. The most recent model energy code, the 2012 International Energy Conservation Code (IECC), raised efficiency standards 30% over the 2006 version of the IECC (model codes are revised on a three-year cycle).

If every state were to adopt this new code, and if builders and architects were to fully comply with it, by 2030 we’d save as much energy as taking 39 million cars off the road or shutting down 47 coal-fired power plants, and reap about $40 billion annually in energy savings.

Buildings account for about 40% of U.S. energy use and carbon emissions, so they represent a unique opportunity to tackle climate change head-on. By developing and adopting stringent codes—and making broad, concerted efforts to boost compliance with them—we can raise the bar for building performance nationwide.

With buildings consuming 72% of all the electricity in the United States, the adoption of more stringent building energy codes is crucial to curbing energy use. But once an advanced code is adopted, does the market comply with it? What if it doesn’t?

Code compliance initiatives, such as education, training, and enforcement, remain neglected and severely underfunded. This has resulted in billions of dollars in missed savings, as many new and renovated buildings don’t, in fact, meet code, and therefore consume far more energy than they should.

Numerous surveys and field studies show that compliance rates are stuck below 50% in many places. Due to a resource crunch and a general lack of education about them, energy codes tend to remain outside of the scope of work in many local building departments. Officials primarily work to protect against hazards such as structural collapse and fire. And that’s understandable.

However, a 2011 survey, conducted by the Building Codes Assistance Project and the Consumers Union’s Consumer Reports National Research Center, found that 75% of the 5,000 respondents “agreed” or “strongly agreed” with the statement: “Energy codes should be enforced like other safety and quality standards of construction.” In 2010, an IMT-led task force determined that every dollar spent on energy-code enforcement yields $6 in energy savings, an incredible 600% return on investment. Those savings translate into higher consumer spending and business investment. This shows that not only does building energy code enforcement save money, but Americans actually desire it.